Home construction is increasing, but Australia is still falling well short of the housing needed to meet future demand.
According to the ABS, construction started on 196,118 homes in 2025, up from 168,492 in 2024.
That’s a meaningful improvement.
But it also highlights how difficult it will be to achieve the federal government’s target of facilitating the construction of 1.2 million new homes by June 2029.
Why supply remains a challenge
Builders and developers are still dealing with:
- Labour shortages.
- High construction costs.
- Planning delays.
- Infrastructure constraints.
In many locations, new housing projects can’t proceed because roads, sewerage, water and power connections aren’t ready.
The government’s latest response
In the recent Budget, the federal government announced a new $2 billion Local Infrastructure Fund.
The funding is designed to help councils and utilities deliver the “last mile” infrastructure needed to support new housing developments.
The government says the program could support up to 65,000 homes over the next decade.
States and territories will only receive funding if they commit to reforms such as:
- Speeding up approvals.
- Making more land available.
- Simplifying building rules.
Why buyers should pay attention
Housing supply has become one of the biggest influences on long-term affordability.
If supply remains constrained while population growth continues, that could continue placing pressure on prices and rents over time.
